Health Care and Jobs

Today’s Managing Health Care Costs Indicator is 430,000

Click image to enlarge.  Source

That’s how  many jobs were created in the health care industry during the recent recession, while 7.5 million jobs were lost in the overall economy.    This was reported on the front page of the business section of last Thursday’s New York Times

I’ve written about this phenomenon before. Earlier this month , I pointed to the increase in health care jobs in July.  In June, I talked about the pain of hospital closings. A year ago I noted the pain of hospital cuts.  .  In late 2009, I talked about the disconnect between growth in health care jobs and controlling health care costs. Health care jobs are good for local economies, although if we have robust growth in health care jobs, we aren’t going to “bend the cost curve.”

This week, the Center for Study of Health System Change released an excellent monograph detailing the reasons for our ambivalence about creating more jobs in health care.   They point out that the costs of some expansions of health care are borne by the local economy (individual and small business  health insurance), while other expansions of health care (like Medicaid and much of Medicare) are funded from outside of the local economy.  The sum of the costs of health care expansions funded from outside of the local economy is between 57-75%.  Hence, even as Washington wants to cut Medicare expenditures, local governments and hospitals push to expand health care, knowing that the bill is being funded by others.  

The Commonhealth blog  has an excellent meditation on capital expenditures at Partners Health Care here in Boston, with a thoughtful interview with CFOPeter Markell .   Bottom line – we all want more capital investments so that we can get the latest and best medical care, which we truly value.  Further, more capital investments in health care, unlike many other industries, have usually been associated with higher employment.  The ugly underbelly of capital investment, though, is that new investments mean higher operating costs and higher debt service that will require higher medical bills in the future.